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MIDA Engages MNCs and SMEs In Southern Region to Further Promote Sustainable Business Linkages

"Given the increased flow of foreign direct investments in recent years, there are now more opportunities than before for SMEs to venture into,” said Datuk Rajendran

17 August 2017, Johor – The Malaysian
Investment Development Authority (MIDA) organised a Supply Chain Conference for the Southern Region in Johor Bahru, today. The
event, graced by Yang
Berbahagia Prof Datuk Ismail Ibrahim, Chief Executive of Iskandar Regional
Development Authority (IRDA) who represented the Chief Minister of Johor. The confence was the third of its series for
2017 after Pahang (East Coast Region) and Penang (Northern Region). According
to Datuk N. Rajendran, Deputy Chief Executive Officer of MIDA in his welcoming
remarks, the supply chain series was kick started with the national level
conference held last year in December at the Ministry of International Trade
and Industry (MITI). Following the successful outcome of the event, MIDA
brought this supply chain conference to the various regions in Malaysia,
focusing on the respective state’s economic strengths.

“We trust that this
platform will further promote sustainable business linkages towards stimulating
the growth of supply chains between the Multinational Corporations (MNCs) and Small-Medium
Enterprises (SMEs) in Malaysia. We also hope that this initiative will open the
right doors for these companies to form mutually beneficial strategic
partnerships.Given the increased
flow of foreign direct investments in recent years, there are now more
opportunities than before for SMEs to venture into,” said Datuk Rajendran

The
Southern region has become the home of many renowned global companies such as
Lotte Chemical Titan, Hershey, Dyson, Seagate in Johor as well as Infineon,
Honda, Konika Minolta, Xinyi Solar in Melaka. Their thriving businesses are
well supported by local players as suppliers of raw materials, part, components
and ancillary services. This modus operandi has served both parties well and
has generally enhanced the robustness of the economy as a whole.

At
the event, SMEs were urged to raise their efficiency levels, strengthen
inter-firm linkages and respond timely to market changes to remain competitive.
Local companies, particularly those in the labour
intensive industries such as the furniture industry, could reap much benefit by
embracing the potential
of Industry 4.0 technologies
including smart manufacturing, robotics and the
internet of things (Iot) to significantly increase production volume and reduce
dependency on foreign labour.

“Under
the Budget 2015, the Automation Capital Allowance was introduced to encourage
automation adoption in the manufacturing sector. The initiative provides
automation capital allowance of 200% for high labour intensive industries like
rubber products, plastics, wood, furniture and textiles. For this scheme, MIDA
approved 32 applications in 2016. In line with
the Ministry of Finance’s announcement to introduce specific incentives in
relation to Industry 4.0 for this year’s Budget, MIDA is currently identifying
suitable incentives to assist companies in their technological transformation
journey,” added Datuk Rajendran.

Johor
will soon have a dedicated industrial park for
furniture industry in Muar. The furniture manufacturing is historically a labour-intensive
industry and primarily dominated by SMEs. In line with the current direction
towards automation and smart manufacturing, MIDA will work closely with Corporation
(JCorp) and other relevant stakeholders to ensure the new Muar Furniture Park will
have all the right value propositions to spur the adoption of Industry 4.0
among local companies. This will further reinforce Johor’s position as
Malaysia’s main exporter of high-value added wooden furniture.

Johor
will also be setting up a Robotic Future City following the signing of an
agreement between JCorp and Siasun Robot Investment during the Prime Minister’s
visit to Beijing in May this year. Once materialised, this RM15 billion project
is poised to develop the robotic industry as well as spur the growth of various
supply chains in the country.

Johor is among the top recipients
of investments in the manufacturing sector. As at 2016, a total of 4,464
projects with investments valued at RM145.2 billion have been implemented in
the state. More than 500,000 locals have benefitted from these projects through
employment. The state continued to sustain its position in 2016 as Johor
emerged as the largest recipient of approved manufacturing projects last year
with 165 projects worth RM26.4 billion. These projects are poised to generate
more than 8,500 job opportunities for Malaysians.

MIDA is the
government's principal promotion agency under the Ministry of International
Trade and Industry (MITI) to oversee and drive investments into the
manufacturing and services sectors in Malaysia. Starting operations in 1967
with a relatively small set up of 37 staff, MIDA has grown to become a strong
and dynamic organisation of over 700 employees. Headquartered in Kuala Lumpur
Sentral, MIDA today has 12 regional and 23 overseas offices. This year as the
organisation celebrates its 50th anniversary, MIDA continues to be the
strategic partner to businesses in seizing the opportunities arising from the
technology revolution of this era.